Stock sell-off could have a ways to go, even if market bounces a bit on Thursday

Stocks could see a quick bounce, but strategists see more heavy selling before the market can find a bottom.

Earnings news from Microsoft and Tesla could be positive catalysts in Thursday trading.

Thursday is the busiest day of the third quarter reporting season so far, with 66 companies reporting.

Stocks could see a quick bounce, but the market is then likely to be rocked by more waves of selling before reaching a bottom.

Wednesday's trading was violent, whipping the Dow down by more than 600 points and squeezing the last of this year's gains out of the Dow and S&P 500. The S&P 500 fell 85 points to 2,656, and is now down about 9 percent this month, and is off by 0.7 percent year-to-date.

Five of the 11 major sectors have fallen into correction territory — or declines of more than 10 percent. The worst performers are materials, off more than 12 percent, and consumer discretionary and industrials, both down more than 11 percent.

Strategists said 2,600 is a possible downside target for the S&P 500, and that would put the S&P into correction territory. "We traded down there and were just below 2,600 in late March, early April. We tried again in early May, so it seems like that 2,600 at least for now is what the market wants to test," said Peter Boockvar, chief investment strategist at Bleakley Advisory Group.

After Wednesday's sell-off, good earnings news from Tesla and Microsoft sent those stocks higher after the closing bell and stock futures were positive Thursday evening. Traders said both Tesla and Microsoft could bring in buyers on Thursday's open.

"The market is watching for a high volume, capitulation low," said Scott Redler, partner with T3Live.com. "If Microsoft or Tesla had missed and we had a big down open [Thursday] that would be a better trading set up." Redler said the market more often finds a bottom on a Monday or Tuesday than on a Thursday or Friday.

"Be careful buying a bounce before we see the results from Google and Amazon," said Redler. Both Alphabet, Google's parent, and Amazon report after the closing bell.

"2,600 is really huge support from the start of the year. 2,650ish which is where we closed is definitely a level but it was hard to buy the close," said Redler. "It's very easy to get run over now."

Thursday is the biggest day of the earnings season, with 66 S&P companies reporting.

Besides Alphabet and Amazon, Intel and Gilead Sciences are among companies reporting after the close.

Important economic reports include advanced economic indicators and durable goods, both at 8:30 a.m. ET.

Boockvar said the market is not going to find a short-term cure, since it is reacting to Federal Reserve rate hikes, earnings warnings, and trade worries.

"Now we're seeing holes in the housing and auto sectors. The new home sales today were terrible," he said. Both sectors are sensitive to rising interest rates.

"You're having guidance issues…when you have names like Texas Instruments saying their revenues are slowing and their chips go into everything," said Boockvar.

Boockvar said the market has to get through several key events —the mid-term elections, President Donald Trump's meeting with Chinese President Xi Jinping in late November, and the Fed's December meeting, where it is expected to raise rates.

"We're a ways from a bounce. I just don't know if it's from today's lows or the 2,600 level. The real test is what happens after that bounce because rallies keep failing. That tells you something's broken here,." he said.

The market typically rallies into year end after mid-term elections.

"It's hard to say what's going to happen. The market's been going up for nine years, and it 's only been down for a month," said Redler.